GM to Sell Opel To Magna (With Conditions)

by Bertel Schmitt

Published: September 10th, 2009

gm to sell opel to magna with conditions

Germany’s Chancellor Angela Merkel herself has confirmed that GM is ready to sell Opel to Magna. The offer comes with yet to be disclosed conditions. However, according to news-adhoc, Frau Merkel “doesn’t have the impression that behind the announcement of Opel is a hidden agenda that sets the threshold so high that in the end there won’t be a sale.” This is politico-speak for: “Do we smell a rat here?” Das Handelsblatt has more details. Magna/Sberbank will take over 55 percent of Opel, GM will retain 35 percent and the workers will hold a 10 percent share. Opel will “remain integrated in the worldwide development network of GM.” On the list of open issues: A written confirmation of the workers that they “will support the necessary cost adjustments” (i.e., take expensive haircuts) and a definitive financing package by the German government.The Opel Trust also approved the deal, says Finanznachrichten.de. Interesting: The Opel Trust holds Opel as security for the €1.5 billion bridge loan. The board of the trust had to vote. Manager Magazin writes that there was one vote against: By the representative of the German government, Manfred Wennemer. He thinks Opel’s costs are too high, their Russian goals unreachable. Thumbs down. Also interesting: The representatives of the states, where Opel has factories, abstained. The deal was approved with the votes of the GM representatives on the board. As for factories, all German factories will be kept open.The factory in Antwerp will be shuttered. In the UK, “Magna said it was committed to keeping Vauxhall’s Ellesmere Port plant open,” says the BBC. “Doubts remain about the firm’s Luton plant.”According to Das Handelsblatt, GM “played poker until the end.” In the end, GM realized that they don’t have the money to hold on to Opel. Yet, the deal is still far from closed. Das Handelsblatt heard from governmental sources: “Whether Magna can live with GM’s conditions won’t be decided before the election date. After that, we will see.”

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments

Join the conversation

2 of 9 comments

Dave on Sep 10, 2009

Will Magna now have to up the pay of their existing employees to match that of Opels people? If they do they become uncompetitive with Lear etc (look whats happened to Delphi and Visteon). If not, how will the unions react? and I can't believe that the workers in Opel/Vauxhall will willingly take a cut to supplier pay levels. Magna have an interesting time ahead of them. rationalise GM-Europe, keep all the unions happy and don't p&ss off their OEM customers while building competitive vehicles...... I admire their ambition. I agree with psarhjinian - VW (and Ford, PSA, Fiat etc) want Opel gone

Like Reply
Psarhjinian on Sep 10, 2009
I don’t see the similarities. Aisin and Denso are keirestu and Delco/Visteon are spin offs. The big difference is that none of them ever produced a single competing vehicle. Toyota effectively controls Aisin. Aisin sells transmissions to everybody. Denso is the same, but they sell to everyone. Delphi (sorry, not Delco--my bad) was effectively controlled by GM. Delphi sells all sorts of shit to everybody. Magna has a stake in (not controls, has a stake in) Opel. Magna sells all sorts of shit to everybody. Functionally, there's not a lot of difference there. Toyota damn well competes with a lot of the companies who buy Aisin transmissions. Those same companies are bankrolling Toyota by buying Aisin and don't seem to care. Magna/Opel aren't really different in that sense. The only reason there might be blowback is that some people (read: Volkswagen) want Opel dead, dead, dead. VW stands (stood?) to gain from Opel's collapse. An extant, if not revitalized, Opel doesn't help a lot of companies, but it's VW who would likely benefit most from the dead cat bounce. It would give them the breathing room they need to stay abreast of Toyota, Ford and the like in Europe.

Like Reply

Recent Comments

B-BodyBuick84 Not afraid of AV's as I highly doubt they will ever be %100 viable for our roads. Stop-and-go downtown city or rush hour highway traffic? I can see that, but otherwise there's simply too many variables. Bad weather conditions, faded road lines or markings, reflective surfaces with glare, etc. There's also the issue of cultural norms. About a decade ago there was actually an online test called 'The Morality Machine' one could do online where you were in control of an AV and choose what action to take when a crash was inevitable. I think something like 2.5 million people across the world participated? For example, do you hit and most likely kill the elderly couple strolling across the crosswalk or crash the vehicle into a cement barrier and almost certainly cause the death of the vehicle occupants? What if it's a parent and child? In N. America 98% of people choose to hit the elderly couple and save themselves while in Asia, the exact opposite happened where 98% choose to hit the parent and child. Why? Cultural differences. Asia puts a lot of emphasis on respecting their elderly while N. America has a culture of 'save/ protect the children'. Are these AV's going to respect that culture? Is a VW Jetta or Buick Envision AV going to have different programming depending on whether it's sold in Canada or Taiwan? how's that going to effect legislation and legal battles when a crash inevitibly does happen? These are the true barriers to mass AV adoption, and in the 10 years since that test came out, there has been zero answers or progress on this matter. So no, I'm not afraid of AV's simply because with the exception of a few specific situations, most avenues are going to prove to be a dead-end for automakers.
Mike Bradley Autonomous cars were developed in Silicon Valley. For new products there, the standard business plan is to put a barely-functioning product on the market right away and wait for the early-adopter customers to find the flaws. That's exactly what's happened. Detroit's plan is pretty much the opposite, but Detroit isn't developing this product. That's why dealers, for instance, haven't been trained in the cars.
Dartman https://apnews.com/article/artificial-intelligence-fighter-jets-air-force-6a1100c96a73ca9b7f41cbd6a2753fdaAutonomous/Ai is here now. The question is implementation and acceptance.
FreedMike If Dodge were smart - and I don't think they are - they'd spend their money refreshing and reworking the Durango (which I think is entering model year 3,221), versus going down the same "stuff 'em full of motor and give 'em cool new paint options" path. That's the approach they used with the Charger and Challenger, and both those models are dead. The Durango is still a strong product in a strong market; why not keep it fresher?
Bill Wade I was driving a new Subaru a few weeks ago on I-10 near Tucson and it suddenly decided to slam on the brakes from a tumbleweed blowing across the highway. I just about had a heart attack while it nearly threw my mom through the windshield and dumped our grocery bags all over the place. It seems like a bad idea to me, the tech isn't ready.